§ Order for Second Reading read.
§ 3.35 p.m.
§ The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Arthur Skeffington)
I beg to move, That the Bill be now read a Second time.
I think that I can be a little more enthusiastic about this Measure than was Mr. Harold Macmillan, when he introduced the Valuation for Rating Bill of 1953 and said:I tell the House quite frankly that no one more dislikes the necessity for introducing this Bill than I do. Ministers, unless very young or very innocent, dislike introducing Bills. They are a great source of trouble and worry and interfere terribly with the proper job of the Minister which, in my view, is administrative and not legislative."—[OFFICIAL REPORT, 21st May, 1953; Vol. 515, c. 2378.]I do not think that the Bill before us today will arouse strong feelings on either side of the House. Indeed, looking at it I think one would come to the view that there never was such a short, modest rating Bill introduced by anyone on any other occasion.
It has one simple point, which is in Clause 1, which goes to the matter of evidence of the kind which may be adduced in connection with the valution of dwelling-houses. It concerns only dwelling-houses. It makes no other change whatsoever in the law. It does not in any way alter the definitions; it does not alter the formula in Section 19 of the General Rate Act, 1967, the Consolidating Act. It takes away no rights of any of the parties or of the valuation officer.
If the House is good enough to give the Bill a Second Reading the fact that additional evidence can be adduced by the valuation officers will, of course, be open equally to all the other parties in rating proceedings whether they are owner-occupiers, tenants, or the local authorities. So, it makes a very minor change indeed. I emphasise that so that there should be no alarm, no dismay, and also because I need not embark upon any long-ranging, comprehensive survey of the rating system which, I imagine 40 in any event would be out of order, because of the very narrow scope of the Bill.
As the scope of the Bill is so narrow that it is directed to adding one small subsection to Section 19 of the General Rate Act, 1967, I think that the House is entitled to have answers to two questions; first, why is it necessary to make this decision now; and, secondly, why is it necessary to enlarge the scope of the evidence?
The definition of the valuation of dwelling-houses is contained in Section 19 of the Act to which I have referred. There are two elements, the gross value and the net value. The gross value is defined in subsection (6) in the following terms:gross value in relation to a hereditament. means the rate at which the hereditament might reasonably be expected to be let from year to year if the tenant undertook to pay all usual tenant's rates and taxes and the landlord undertook to bear the cost of the repairs and insurance and the other expenses, if any, necessary to maintain the hereditament in a state to command that rent.The net value is obtained by taking from the gross value a proportion of rent which is specified from time to time by the Minister and which is intended to cover the actual expenses of repair and other contingent expenses of that kind which, for the purpose of dwelling-houses only—this does not apply to other hereditaments in the rating law—are considered to be the landlord's responsibility.
That is how the gross value and the resulting net value are determined in accordance with statute. Although even that concept is not the easiest to work out in practice, as innumerable cases indicate, nevertheless the difficulties, I think, have been very well understood. A difficulty has arisen over the years, however, and is now assuming considerable proportions for valuation officers and all others who work in this field. The best rating evidence, apart from other evidence which has to be weighed by the valuation court and the Lands Tribunal, is always held to be evidence of actual rents in the market negotiated between landlord and tenant.
The trouble is that actual reliable evidence of transactions of this kind where rents are negotiated freely in the market is becoming extremely rare. This is not 41 difficult to understand when one realises that about 50 per cent. of all dwelling-houses in England and Wales—as will be seen from Clause 2, the Bill does not apply to Scotland and Northern Ireland —are now owner-occupied.
About a quarter of the remaining half are publicly-owned houses of one kind or another where other factors beside that of the market may determine the rent. Of the remaining quarter a very large proportion indeed are subject to some form of statutory control and, therefore, again one does not get the free market rent.
I have discussed this with some valuation officers over the years. They find it extremely difficult when they are compiling their lists in five years, or, as the House may specify, to get the best evidence which some courts have always interpreted as the only evidence on which they can determine the valuations in question. It is true that the valuation officer has always, in practice—the courts have recognised this-had some discretion to go a little more widely than his immediate locality.
I do not think that he is barred by Statute from going anywhere, but obviously, if the valuation officer is in town A and town B is more than 100 miles away, the courts might attach little weight to the evidence he gives from town B. They may think that it is not comparable evidence in connection with the determination they are asked to make.
We are moving a little way away from the rigid rule—how far will depend on how much the valuation officer weighs his evidence: and the court will decide what weight to give to the evidence—but if the court interprets rigidly it may be that no evidence could be admitted. The valuation officer may be in the unfortunate position of not being able within his area to produce sufficient evidence. The courts have moved away to some extent from this rather rigid rule, in practice, of arguments about local houses of similar quality.
That very great judge who has done so much to clarify the law, and who is such a brilliant expositor of English law, the Master of the Rolls, Lord Denning, said only this year in the case of Garton v. Hunter:Nowadays, we do not confine ourselves to the best evidence. We admit all relevant 42 evidence. The goodness or badness of it goes only to weight and not to admissibility …The courts, therefore, are taking a more tolerant view.
However, it would not be good enough just at the time when work is commencing on the revaluation for 1973, to leave this matter either for the valuation office or, indeed, anyone else who wishes to comment or take part in proceedings, unresolved without giving some help. The general rule which would be observed in most valuation courts and by the Lands Tribunal for certain purposes would be to impose some restrictions if they felt they were not bound by evidence which might come from some distance away.
A further difficulty has arisen. There is reference in Clause 1 of the Bill to dwelling-houses of other descriptions. Over the years there have been complaints, not to put it too strongly, by some occupiers of dwellings that they are bearing an unfair burden of the rate, in comparison with those in other categories of property. We have seen this very much in the case of occupiers of fiats who sometimes, certainly in areas of London and other big cities, feel that their valuation is disproportionately high compared with similar types of accommodation in houses. This has often been expressed too by occupiers of bungalows.
It has been an invariable rule of practice, always carried out by the Lands Tribunal, that if one is discussing the valuation of flats the valuation officer or anyone else is not entitled to bring in for comparison or comment the valuation of ordinary dwelling-houses. This would appear to be wrong. Therefore, Clause 1 of the Bill provides that in future it will be possible to bring into a valuation, possibly in argument, other types of property.
I am not saying, still less promising, that occupiers of flats will suddenly find that their valuations will go downward. All I am saying is that it seems to us—and expert opinion is fully behind this decision—that the time has now arrived in reaching valuations for all types of accommodation to be considered and contrasted. We feel that this is reasonable.
The way in which this will be done obviously will be a matter for argument before the tribunal before which the matter is contested. A tribunal will not 43 say that every flat of a certain cubic dimension is to be valued at a certain figure and that, therefore, a house of double that dimension will be double that valuation, or vice versa. The basis will still depend on an assessment of individual properties. The normal basic rule will remain that each hereditament will be valued, but it will be possible in argument for reference to be made to other comparable properties.
This is all that Clause 1 provides. It enables the valuation officer and anyone else to look much more widely than hitherto they have thought right to do, without risk of their evidence being rejected by the court as inadmissible; it also enables all types of dwelling to be brought into the argument.
The second question that might be asked is why the Measure is required now. Because of the narrowness of the Bill, I am precluded from any wide-ranging discussion of rating systems—
§ Mr. Michael English
(Nottingham, West): Is that last statement correct? Is it not possible for my hon. Friend the Parliamentary Secretary to refer to matters outside the scope of the Bill?
§ Mr. Speaker
The hon. Gentleman himself twice put correctly the answer to this point of order. On this Bill we are not discussing the major Bill to which this is an addition, except in so far as it arises out of this Bill.
§ Mr. Skeffington
I was trying to avoid the need to embark upon a wide description. But I should tell the House, since it is relevant, why the Bill is required at this moment in advance of action on the Royal Commission's recommendations, and why a wholesale rating Measure is not being brought before the House at this time.
The urgency of the Bill arises in connection with the 1973 revaluation. The House, in 1966, agreed that the revaluation which should have taken place in 1968 should be postponed to 1973. The valuers are about to begin on the massive task which will occupy them for a number of years. If, when compiling their lists, valuers were in doubt about evidence to be put before the court, both in regard to proximity and other types of dwellings which could be considered, this not only would add considerably to the practical work of valuation but would mean that 44 they would be proceeding on an uncertain basis.
We have taken the best advice we can, both expert and lay, and, so far as I know, there is no objection to this very modest proposal. We feel that the Bill should be presented now so that valuation officers, rating surveyors and many others will know the quality of evidence which will be admitted and the other features which I have mentioned. That is the reason that the Bill is being presented now, in advance of any change which may follow any reorganisation of local government. I hope that the House will feel that the Bill should be given universal support.
§ 3.55 p.m.
§ Mr. John M. Temple
(City of Chester): The Minister, in introducing the Bill, described it as modest. He took a liberty when he said that it took away no rights! I shall later explain to the House that it takes away from ratepayers considerable rights.
The hon. Gentleman also claimed that there had been no criticism of the Bill. Certainly, because little time has elapsed between its publication and Second Reading. The Bill, although small, is complicated and its effects will be fairly far-reaching. I inform the Minister of Housing and Local Government, whom I am glad to see in his place, that experts at provincial level have not been able to get their evidence to the centre so that it might be available, nor has this evidence been available to the associations which study these matters closely.
I forecast that considerable objection will be raised to the Bill, although nobody—certainly no hon. Member from this side of the House—would wish revaluation to be postponed beyond 1973. The postponement since 1963 has been long enough. I have heard various comments made by experts, one of whom described the Bill as a monster, and another described it as a mouse. I describe it as a tepid Bill. I am not fond of tepid things. Last night I stepped into a tepid bath and I did not like it. This is a tepid Bill which I do not tackle with enthusiasm.
The Minister could have gone a little further. We might have had a categoric guarantee that we were to have a revaluation in 1973. This is what all the experts outside wish to know. It is the 45 64,000 dollar question. Are we to have this revaluation? If we are to have a revaluation on a proper basis, then a little more than this tepid Bill is needed to put things in order.
The Minister was fair—and the Explanatory Memorandum is explicit—in saying that the underlying objective of the Bill is to ease the burden on the valuation office. But who put it there? Undoubtedly, it was put there by the Government with their decision to introduce the Land Commission. That is the real reason that the valuation officers are overloaded.
The Minister was wrong when he said that the Bill would take away no rights. I am afraid that ratepayers who lodge appeals will find themselves in the gravest difficulties. The Minister said that the valuation officer will be able to take into account values not only of houses but of flats and bungalows in the area of the rating authority as well as over a wide area of the country. I will go into more detail later since this is the heart of the Bill.
I am very chary of small print. When the Prime Minister says anything, I always watch for the qualification. When written statements are made, I watch for the asterisks! This is a small Bill, but I am just as careful about small Bills as I am about small print and asterisks!
There is no need for Parliament to turn itself into a bureaucrats' protection society. If we pass the Bill without qualifications and changes, that will be the effect. The bureaucrats will gain. They need to gain, of course, because they are in such difficulties. I do not criticise them in that respect. But we do not need to turn ourselves into a benefit society for them.
The Bill is extremely significant in that it underwrites the near-certainty that rates will continue as the major source of locally raised revenue. I find that interesting. I have always suspected that, at the end of the day, the year or the decade, that would still be the position. It would always be our intention that rates should be levied on as fair a basis as possible.
The Bill says that, for rating purposes, existing gross values can be taken into account as a basis for rating. I hope that the Minister will tell us whether capital 46 values can be taken into account as well. Surely there is a direct relationship between capital values and rentals. Capital values are better known throughout the property world than any hypothetical rent or rental evidence which may exist. The hon. Gentleman said that rental evidence is tenuous, and I agree with him.
§ Mr. Peter M. Jackson (The High Peak)
Would not the hon. Gentleman agree that in some instance gross values do not always reflect rentals, in that there is a considerable disparity between the rateable values and hypothetical rentals of flats and of dwelling-houses?
§ Mr. Temple
I shall deal with that point in a moment. I think that the hon. Gentleman is a little confused.
As the Minister said, there is a direct relationship between gross values and net annual values, or rateable values as they are called. We on this side would like to see a fair basis for gross values. If we get gross values fixed on a proper basis, they will represent a magnificent yardstick for fixing fair rentals, and it is one which would have been used by a previous housing Minister had it been accurate. I think that that is the short answer to the hon. Gentleman.
Prior to the introduction of this Bill, the rating of dwelling-houses was essentially a local matter. Comparisons were restricted to the area of the rating authority. I see a danger arising from the much wider comparison which is suggested. No doubt the valuation office will be able to make it, but it will be very difficult for the ratepayer concerned to have regard to a miscellany of valuations on houses, flats and bungalows of different descriptions all over the country. The ratepayer will be at a distinct disadvantage, and rates will lose their identity as a local tax.
The Bill is less than a serious attempt to bring equity into the rating system before the next revaluation. I hope that it is attempting to do more than give the Inland Revenue an opportunity to revalue from an armchair on a formula basis. If the idea is to enable the Inland Revenue to use a multiplier in an office remote from the site, the Bill will be a disaster. I reply upon the Minister's words when he said that there will be an element of 47 inspection, but I hone that it will be more than just an element.
I will now deal with the specific aspects of the Bill. The first of them is the administrative difficulties. The second is the effect on domestic ratepayers, of whom there are a great many. The third is whether the proposed system is fair. The fourth is to ask why we have such a limited Bill. Then I shall have a few technical questions to raise.
Dealing with the administrative difficulties, no one under-estimates the great problems of the Valuation Office of the Board of Inland Revenue, and I wish to pay tribute to those in it. They have a remarkably heavy task at all times, and preparing for a revaluation is a mammoth one.
It is not without interest that the work of that office was examined by the Estimates Committee fairly recently. On Wednesday, 5th March of this year, Sub-Committee C of that Committee took evidence from the Chief Valuation Officer, Sir Douglas Iggulden, which was concerned directly with the position of the 1973 revaluation. At paragraph 300 he was asked:Has the work yet been begun on the 1973 revaluation?He replied:We have not yet surfaced.The public as yet are unaware of anything that we are doing towards a revaluation. We have to have something like 20 million forms prepared.This is the first public appearance of the 1973 revaluation, and this Bill is preparing the way. There is no doubt that it is a formidable task, but we must ensure that ratepayers have a fair deal and, at the same time, that the administrative side has an easier run. The Bill is slightly weighted in favour of giving the Valuation Office an easier run. It is hoped to ease the extreme administrative difficulties, some of which have been caused by the actions of the present Government.
The Chief Valuation Officer's answers, in paragraphs 276 and 277 set the scene for the debate. Referring to valuers, he said:We are well short of what we really need. Of course, we are short all over the country.48 In an answer in paragraph 301, referring to the 1973 revaluation, he said:This will be the third revaluation with which I have been concerned. I was never happy over the other two. I do not think I will be any happier over this one.The Chief Valuation Officer was not happy during March of this year. I do not know whether this Bill will make him any happier.
Very much more needs to be done to the rating system than a mere tinkering with or adjustment in respect of domestic dwellings. The rating system raises an enormous amount of revenue, and we should seek to make it fair right across the board. It may be administratively difficult, but a great deal more could be done. The Minister and his Department are responsible for not doing it now.
Sir Douglas Iggulden told us why there was a postponement from 1968. The 10-year gap from 1963 to 1973 is far too long. In paragraph 310 Sir Douglas was specific about the reason. The question was:How much work has been added by the Land Commission Act and what adjustments have you had to make?Sir Douglas's answer was:When the Land Commission Act first came into being, you will remember that we were excused doing a revaluation last year, in 1968.The cat was out of the bag. The Land Commission Act was the prime cause for a revaluation not being brought about in 1968. I wonder what the Land Commission Act is doing now to the valuation office. I am afraid that it is making its task in all spheres very much more difficult—
§ Mr. Speaker
Order. A discreet mention of the Land Commission Act is permissible, but not a detailed debate on it now.
§ Mr. Temple
I was quoting the chief valuer. Those were his specific words in giving his reason for the postponement.
I leave that point. However, I think that I am allowed one more quotation on this theme, because it is the basis of my attack on this Measure. I refer to a learned professor, Professor A. R. Ilersic, who is so well known to what I may call all the "old boys" in this sphere. Professor Ilersic was the author of a pamphlet called "Rates", published by the 49 Institute of Municipal Treasurers and Accountants in February, 1969, so it is up to date. In that pamphlet he says:The first need is to cut down the current waste of valuation resources involved in the working of the Land Commission and to ensure that all valuers work on preparing a new valuation list.Again., administrative burden is the raison d'etre for this piece of legislation. Let there be no mistake about that. The Explanatory Memorandum mentions that the prime cause is to ease the administrative burden.
I have recollections going back over many years of how often the Labour Party wrecked sound systems and then said that they did not work. The rating system is perfectly good if it allowed to work properly, but it has never been allowed to function in the way that it might have done.
I now refer to the 20 million forms—part of the administrative burden—which the valuation office is sending out.
I noticed a short article in the Daily Mail on 3rd November which said:Warm up now, pay later.This was referring to an aspect of the form which is being sent out on which a householder has to state all sorts of things including whether he has central heating installed in his house; not whether he is thinking of putting it in between now and 1978.
The reason I say 1978 is because these forms will not go out again before the 1978 revaluation. So that householders who are fortunate enough to receive a form now and have not got central heating will not need to tell anyone when they do have central heating, and they will thereby gain at the expense of all other ratepayers.
This is different from an alteration carried out as a result of planning permission, because the local authority sends a copy to the valuation office so that it is alerted. If a householder makes an alteration with a do-it-yourself kit and does not inform the valuation office, it will not know for five years—and in this case 10 years—that an alteration has taken place.
I make this point because there is no real alternative to a wide system of inspections by the valuation office. I do 50 not believe that any amount of form filling will bring the same results as inspections on a thorough basis.
§ Mr. English
I think that we all take the hon. Gentleman's point. But surely the form filling is irrelevant after what happened, for example, in the days before there was any planning permission. The principle of alterations to property only taking effect very often in practice, though not in theory, at the next valuation, has been going on for centuries.
§ Mr. Temple
What has not been going on for centuries is the enormous amount of added work which has been placed on the valuation office. In the old days the valuation office was able to perform its task in a proper manner without an enormous number of forms. I am frightened that this will be a bureaucrats banquet and that the valuation will be done on the basis of what is in the forms. I will explain more about this later.
I should like the Minister to tell us whether his Department will authorise local authority staffs and private firms of valuers on contract to help the valuation office. Without an immediate authorisation of this nature this task cannot possibly be done on an equitable basis.
§ Mr. Martin Maddan (Hove)
I have not been lucky enough to receive such a form. May I ask what are the statutory penalties attaching to perhaps incomplete or erroneous fulfilment of it:? Does it have the status of an Inland Revenue form for income tax purposes?
§ Mr. Temple
Like my hon. Friend, I have not been favoured with one of these forms. It all goes to show just how inequitable the system is that my hon. Friend and I have not been favoured with these forms, but other householders throughout the country have.
I was drawing attention to the inequities. If my hon. Friend and I had installed central heating today we should have had to return this on the forms which we should no doubt complete tomorrow. But others who received these forms some weeks ago would be entitled to install central heating today and would not have to make any return at all.
On the other point raised by my hon. Friend, considerable penalties attach to 51 any misrepresentations or wrongful information given on these forms.
I have my doubts whether these new proposals are fair. First, this new system, as I call it, brings in a comparison of the value of dwelling-houses all over the country. I cannot understand why the valuation office want this power only in respect of dwelling-houses. There are many other spheres of rating, and I will mention one or two. What about the mixed hereditament, the shop and dwelling-house combined? It will not be permissible to compare the rentals of those all over the country.
What about commercial properties? I am not saying that it is necessarily a bad system. but if it is good—and I presume that the Government think that it is—why not extend it to all other kinds of property? Surely rental evidence is fairly difficult to find. Many specialist types of properties may not be in wide evidence in a particular rating area, but may be self-evident if we cast all over the country. I am merely asking why it is limited to dwelling-houses only.
Secondly, why mix up rental evidence of houses, flats and bungalows? The Minister, in introducing the Bill, said that flat owners might not expect their rateable values to go down. In that case, house owners will certainly expect their rateable values to go up, because there will no doubt be an equasion between the two categories.
Dealing with the second point first, the mix up of the rental evidence, I believe that this is the most serious matter with which we have to deal. The Minister made a certain calculation. I make a different calculation about the area of rental evidence which will exist. My calculation is based on the advice of Professor Ilersic. I do not think that he is wrong, and that is why I quote his figures. In England and Wales about half the dwellings are owner-occupied. There is no rental evidence there. One-third of the dwellings are council houses, so there is no genuine rental evidence there.
That leaves us with one-sixth of the domestic dwellings, and of those, about half, or perhaps slightly more than half, are subject to controlled rents of some kind or another. That means that there is evidence in the free rental market of 52 only about one-twelfth of the dwellings in this country. Of that one-twelfth, in London there is a high proportion of flats, and in the provinces there is a high proportion of houses.
I am making these points to indicate, that if, as the Government propose, we are going in for a pool basis for rental evidence, the pool will be extremely turgid and mixed up, and that when a ratepayer has to appeal against a pool of evidence he will have a mighty poor chance of succeeding against the valuation office.
Now I turn to the dangers to ratepayers of the wider comparison. At the moment, under the present system, a ratepayer can look round his own area for somewhat similar houses which are on a rack rental basis and then go to the valuation officer and say, "I want my valuation compared with, say, half a dozen houses which we can see comparatively locally". That is a comparatively easy comparison to make, both for the valuation officer and for the ratepayer. But under the new system, the "pool formula" basis as I call it, I do not think that the ratepayer will stand a chance. The valuation officer will be able to say, "Our valuation is on an amalgam of rents of houses, flats and bungalows drawn from a very much wider area". The poor ratepayer will be beaten before he starts. I believe that the ratepayer deserves a pair of braces, or even a belt, to hold up his trousers. The Bill will take away both his braces and his belt.
§ Mr. Skeffington
The hon. Gentleman said that under the present system a ratepayer can find half a dozen comparable houses and tender them as evidence. Nothing in the Bill will prevent him from doing that in the future. The hon. Gentleman will find that in Lands Tribunal cases time and again the ratepayer has wanted to go much wider than locally to get his comparison. It is the ratepayer who has as much interest in this as the valuation officer has.
§ Mr. Temple
I do not deny that under the new system the ratepayer will be able to pick out half a dozen houses, but the valuation officer will be able to say, "I have drawn my comparison over a very much wider area". There may be evidence of ratepayers wanting to make a comparison over a wider area, but ratepayers are normally relatively small 53 people who do not want to get involved in the enormous costs of an action, and, therefore, they will not be able to get all the evidence which the valuation office will readily have at its disposal. The position of the individual ratepayer will be seriously prejudiced by this system.
§ Mr. Skeffington
The court will always have regard to the weight of the evidence, and the best evidence, and if the ratepayer can produce six examples of local houses that will be by far the best evidence. The hon. Gentleman's argument is non-founded.
§ Mr. Temple
I do not agree with the hon. Gentleman. It has been suggested to me by outside experts that what will happen is that the valuation officer will say, "Very well. Your rateable value is all right. We will make proposals to bring the other six houses to a higher level", because that pool of evidence possibly will indicate that they should be on a higher level. That is how I understand the Bill, and I think that one or two of my hon. and right hon. Friends will say something about this matter.
Why is this such a limited Bill? What is required before the 1973 revaluation is fairness and clarity over a very wide area, and there is no doubt that the nationalised industries are getting off far too lightly in the area of rating at the present time. I mention particularly one glaring example, British Railways, which is known to the Minister. I mention also, because it was brought up at Question Time today, the tremendous strides which the Gas Board is making
§ Mr. Temple
The purpose of the Bill is to make things fair and equitable, looking forward to the revaluation of 1973, and I think that I am entitled to make just a passing reference to these matters. Natural gas is being brought in, treated and purified. Because it is deemed to be a purification, it is not a "process", and, therefore, under rating law it is not rated as process plant.
How stupid can one get in this technological age, in this "white heat" about which the Prime Minister talks, if one cannot recognise the difference 54 between purification and processing and put it right in a Measure of this nature? I should like equity to be brought about in the whole field of rating law.
I said that I would deal with a few technical points. I propose to ask the Minister some questions directed to the technicalities of the Bill. Why should the valuation officer be permitted to base an assessment on the relationship between rents and gross values? Anyone would think that gross values had been achieved by an almighty wand, and that they were perfect. But, if one thought that, one would have to listen to the words of the then Minister of Housing and Local Government, now the Secretary of State for Social Services. I sometimes get rather mixed up with the shuffles in the Government hierarchy.
The right hon. Gentleman, when talking about gross values, said:… in a really large minority of cases "—he was talking about London—the rateable value is a positively misleading factor in relation to a house. Unfortunately, under the new valuations, it is reckoned that in some areas more than a quarter of the rateable values are unfair."—[OFFICIAL REPORT, 30th June, 1965; Vol. 715, c. 705.]If gross values—and gross values are referred to in the Bill—were unfair then, they are unfair now, and yet the Government are taking power for the valuation officer to make a comparison between unfair gross values and present rents. What will be the advantage of a comparison? When the underlying basis is unfair, what is the value of the ultimate comparison? I believe that it is absolutely valueless, and that in this respect the Government have made a glaring error. Unless they can say that gross values now have a direct relativity to the value of property, there is no reason why they should claim that this comparison should be made.
If gross values had been accurate the then Minister of Housing and Local Government would have used them as a basis for fair rents. He would not have required a rent assessment to be made to achieve fair rentals. He could have used the gross values. That is what he said he would have liked to have used. Gross values as a yardstick are not accurate, and should not be perpetuated for purposes of comparison and as a basis for rental evidence.
55 There is a third technical point. Is in reasonable, when the basis of valuation of domestic properties is being changed to this extent, to allow the ratepayer only three months to object to his new valuation? For those hon. Members who are not familiar with all the provisions of the 1967 Act I draw attention to Section 67, which provides that such objections shall be made within the period of 1st January to 31st March, 1973. Given the basis of the extraordinary difficult comparison which the ratepayer will have to make, it is not fair to allow him only three months in which to lodge an objection—and I understand that the time can be cut down but not extended.
I want to make it clear on behalf of my right hon. and hon. Friends that we wish a revaluation to take place in 1973, but we want that revaluation to be fair to all ratepayers. The Bill deals with the domestic ratepayers. We do not want a form and formula job. We want valuations to be based on thorough in spections. I do not believe that any form can describe an environment. No form can adequately describe the effect upon properties of being on a flight path into Heathrow Airport, with aircraft flying overhead continually. No form can say whether a property has a beautiful vista, or a view over a sewerage works. Forms are quite inadequate as the bases for valuations of houses.
Furthermore, on the basis of formulae, is it possible to value a house purely on the number of super feet, the area of window space and the number of electric light points? No. There is much more to the valuation of property than the evaluation of all those factors. The factor of prime importance in the valuation of a domestic dwelling is the desirability of that dwelling. Nothing but an individual inspection can safeguard ratepayers and make them feel that they will get a just deal. I have described the Bill as a bureaucrat's benefit. It has been made necessary by the Land Commission. The domestic ratepayers deserve far more consideration than they will get under the Bill, and we shall do our best to amend it in that regard. Our aim is to give ratepayers a square deal. That is what we stand for.
§ 4.32 p.m.
§ Mr. Michael English (Nottingham, West)
My hon. Friend the Minister has implied, correctly, that the Bill has a very limited scope. The hon. Member for the City of Chester (Mr. Temple) went to the extent of describing it in even blunter terms. I agree that it is a puny Bill. Many of the points made by the hon. Member were quite fair.
The hon. Member went wrong, however, in over-elaborating his case. Let me give an example. He said that there is no real rental evidence in the case of local authority dwellings. I hope that he realises that there is no real evidence of their capital value on sale, either. By "no real evidence of their rental value" I take it that he means that they are let at, broadly speaking, the total cost in the housing revenue account less the available subsidies, divided up suitably among the houses.
In other words, they are let at a level which may well be less than the economic rent—and the economic rent would be higher than the difference that the subsidy makes between their cost and what the economic rent might be in an overcrowded area such as London. I hope that the hon. Gentleman realises that I am dealing with three things: the economic rent, the cost rent and the present rent which is the cost-less-sub? sidy rent.
§ Mr. English
That is what I have called the economic rent, which in an overcrowded area would be higher than the cost- less-subsidy rent. There is no real evidence about the rack rental, I agree. But what is the alternative? It is, surely, as the Bill implies, a comparison between owner-occupied or rented houses in private hands, in some way. But there is no evidence of the capital value on sale of local authority houses. If the hon. Member says that it is not possible to take the rack rental, but the equivalent value is the market value on sale, where is the evidence on that?
I know that some local authorities occasionally sell their houses to an individual, but such a house will usually be in an area of local authority rented property and will have a lower market 57 value than would a house in the middle of an area of owner-occupied houses. The hon. Member has over-elaborated his case.
Nevertheless, like him, I am not entirely happy with the Bill, primarily because of what it leaves out. I realise that in this debate we cannot deal with the whole of local authority finance, but it is fair to say that the Front Bench opposite has more responsibility, in terms of time, than does my own Front Bench. Nevertheless, Governments of both parties have procrastinated greatly in terms of local authority finance.
My hon. Friend shakes his head, because the possibility now arises of this matter being investigated. But the possibility has been there for many years. It still needs looking into. It needed looking into long before the recommendations of the Redcliffe-Maud Commission concerning local government boundaries and functions were published. It needed doing before; it needs doing now, and it will still need doing, I guess, in several years time.
At the moment, we are talking about a method for the valuation of properties the taxation upon which produced £1,568 million in 1968 out of a total local authority expenditure—current and capital—of £5,682 million. In other words, this is the largest local source of local authority revenue. But—as the hon. Gentleman refrained from mentioning, but as we know, although I doubt whether the average ratepayer knows—it is a relatively small proportion of the total expenditure of local authorities. What local authorities need is more than half the United Kingdom income tax, or more than half of all Government taxes on expenditure, including S.E.T., to make up the difference between what they really spend and what the rates bring in. We could be doing something towards that.
I do not suggest that my hon. Friend can now transfer a large chunk of Government taxation from the central Government to local authorities, but I do suggest that he could be doing something more about rating. In respect of owner-occupied property a different method of valuation altogether might well have been considered by Her Majesty's Government. Their capital values are available and their rack rents are not available. There 58 are anomalies in other fields—commercial fields—but I do not suggest, as the hon. Gentleman did, that this arises only with nationalised industries. There are some strange anomalies in a variety of fields of rating which could well have been dealt with in such a Bill as this. It is relatively rare that we have an opportunity to discuss this matter, yet it is a matter of passionate concern to the average person in all our constituencies as we know when the rate demands come in at the appropriate season of the year.
There is some criticism, due to the fact that the Bill is so limited in scope, but, taking its scope as it is, I do not see the force of the complaint of the hon. Member. I cannot see why this is not the logical outcome of the fact that the Inland Revenue is doing the valuation at all. Originally, the valuation was performed locally by local authorities. At one time, I believe, it was the overseers of the poor or something like that. They were performed locally by modern local authorities until relatively recently, when, for the very reason that there was criticism by individuals of the fact that the valuation in one area could be quite different from that in the area next door, just as they criticised the different systems of street lighting or education which they found when they moved across local authority boundaries, it was transferred to the Inland Revenue.
Since it was transferred, it seems to me that if we are going to give valuation to a central organisation, so that it can be fair on a national scale, instead of differing from area to area, it would be quite illogical to say that, although they are supposed to do it as a national organisation, they are not supposed to compare one area with another.
Therefore, on that point, the Bill is the inevitable and logical outcome of the transference of valuation from local authorities to the Inland Revenue. Something similar is true with regard to the comparison between flats and houses—
§ Mr. Temple
Would not the hon. Gentleman agree, then, that if it is logical to do it all over the country in this limited sphere, it should be done for other types of property as well'?
§ Mr. English
I willingly accept that. As the hon. Gentleman will know, there are certain types of property for which it 59 is done nationally, such as the nationalised industries, which he mentioned, but I agree that if the principle is valid here it should be applied in other cases. Where I differ from the hon. Member opposite is in his claim that it was making more difficult for people to appeal against valuations. I agree with my hon. Friend that it was the complaint of the ordinary householder which caused the transference of valuation from local authorities to the Inland Revenue, but we did not at that time give the Inland Revenue the tool for the job, which, to avoid the very complaint which gave it the job, was surely the ability to compare valuations in one authority with those in another.
So I think that the hon. Member is resisting a Bill which does a good thing on the grounds that it does not do another good thing in relation to other types of property. It is a valid point, which I accept, but it is not a valid criticism of the Bill, except in so far as the Bill is limited in scope.
But the other side of the comparison is between flats and houses which is surely desirable. But the sort of thing which the Bill could have tidied up on this very issue is illustrated by the text of the Bill. In normal housing law we use the term "dwellings" in one sense, whereas in this Bill we use the term "dwelling-houses" in a different sense from the Housing Acts. In a Bill like this, dealing with this peculiarly technical subject, the opportunity might have been taken to tidy up some of the archaisms in the whole rating law.
I agree that the Bill is far too limited and puny, and that, unfortunately, once we have given it a Second Reading, we shall not be able to extend its scope in Committee. What is untrue is to say that, within its rather limited scope, it is an unnecessary or an undesirable Bill. I entirely welcome it, but I wish that it had done a great deal more than it does.
§ 4.45 p.m.
§ Mr. Arthur Jones
(Northants, South): It would have helped the House a great deal if the Minister had elaborated on the disadvantages that the Inland Revenue finds with the present methods of valuation for rating purposes—[Interruption.] If there is no evidence of the present dis 60 advantages, on what grounds can the Bill—
§ Mr. Skeffington
The difficulty is simple. In relation to dwelling-houses, the Inland Revenue is finding it increasingly difficult to get, as it is required by practice and to some extent by Statute to get, the best evidence, which is the actual evidence of rents settled in the market. This is the great and sole difficulty.
§ Mr. Jones
This is the point emphasised by my hon. Friend the Member for the City of Chester (Mr. Temple) in referring to the rental evidence available, and I think that he reduced it to about one-twelfth of the total house stock in the country. But is it wise, first of all, to try to relate the rateable values on flats and the valuation subsidiaries for rating purposes, which are relative to the valuation of flats, to what I consider to be quite a different set of criteria for the rating valuation of houses?
We are thinking in terms of the superficial area of the accommodation, the cubic capacity, the amenities, the standard of fitments, and so on, in properties, whether they are flats or houses. There are grounds for my opinion that there is a wide range of variants which goes into the valuation of houses on the one hand and flats on the other. I should have been pleased to hear the degree to which it is felt in the Inland Revenue that these can be harmonised. I know that valuation for rating purposes is a complicated matter which has been built up on years of experience and expertise, but to try to provide now for all these formulae to be changed without saying how seems to me to carry little weight.
This surely bring us to the point that, if the Inland Revenue is to require valuations to be done in a certain way, so that comparisons are possible between flats and dwelling-houses, a much greater rigidity will be introduced into rating valuation. One of the salutary factors in rating valuation has been the lack of rigidity and the degree to which each case is dealt with on its merits. When one thinks of the lack of uniformity in houses, and certainly in flats, one realises that each case must to a great extent be dealt with on its merits.
I should like to hear from the Minister whether there is to be a change in 61 the Inland Revenue's attitude to valuation—whether, instead of the recognition of the wide variants, a much greater rigidity will be introduced, so that there will be the dead hand of uniformity across rating valuations in the incredible variety in properties.
§ Mr. Peter M. Jackson
Would the hon. Gentleman agree that his use of the word "rigidity" might be unfortunate in this context and that "uniformity" might be more appropriate? I suggest that the public generally would welcome a degree of uniformity in this matter.
I have had some experience of taking valuations to court. I have found in one area a disparity being allowed by a rating officer—for example, a disparity between a second floor and a ground floor flat because it was felt that the notional rent of the second floor flat was lower while in another area, when I lived in an identical flat on the second floor, I was told that the hypothetical rent of my flat and that of a ground floor flat were the same.
I reject that. Like the public generally, I would like to know where I stand and, for this reason, I suggest that the word "uniformity" might be more satisfactory—
§ Mr. Deputy Speaker (Mr. Sydney Irving)
Order. The hon. Gentleman is making a speech rather than an intervention.
§ Mr. Jones
I appreciate what the hon. Gentleman is saying. I am concerned with the equity of the situation. I am anxious to avoid rigidity and uniformity because I cannot see how they are acceptable in the infinite variety of accommodation that exists. I appreciate the problems that are presented for the Inland Revenue and those who are professionally engaged in rating valuation matters, but the facts must be faced.
One must ask whether the Bill will ease the burden on the valuation office. Will the introduction of rigidity into rating valuations provide the solution we want, and is it the only solution available?
§ Mr. Skeffington
I pointed out that we believe that it will have advantages for everyone engaged in this sphere; the ratepayer, who will have a distinct advantage, the local authority and the professional experts.
§ Mr. Jones
That does not answer my question about bringing rigidity into rating valuations. I, too, am looking for greater fairness and ease of assessment of properties, but whether the Bill will achieve that remains an open question.
We are told that comparisons shall be made over wider areas of properties. The Minister said that in a number of cases private owners had asked that such comparisons should be made. I suggest that what is proposed will be a mixed blessing for both constituent parties in the problem. On the one hand, the private owner may be faced with comparables over a wide geographical area of which he has little knowledge and over which it would be extremely expensive for him to instruct professional advisers to cover.
On the other, I can envisage an absurd situation arising in which a valuation officer's figure is challenged, with a private person, or a professional adviser acting on his behalf, making comparisons over vast areas. That could cause the valuation officer an incredible amount of work, because he would need to check against the comparables being put in. One can think of comparables being made in Southend and South Shields, or in Exeter and Newcastle.
These are the absurdities which could be drawn into the unqualified geographical requirement outlined in the Bill. No qualification of the area appears in the Bill and nothing is said about economic variants not being disproportionate. The Minister should have been looking for ways to limit these geographical areas.
I therefore question whether the Bill will lead to greater rigidity in the valuation of residential hereditaments for rating purposes and whether there will be a real saving. If the Government are satisfied that it is necessary to have comparables over a wider area, will not this lead to even greater complications on both sides; that is, for the valuation officer and the private person engaged in a dispute over a rateable value? The same applies to any professional advisers acting in such cases.
§ 4.56 p.m.
§ Mr. Ted Leadbitter (The Hartlepools)
When debating a subject of this kind we must first ask what the Bill is expected to do. Having found the answer to that 63 question, we must go on to ask whether it will achieve that end without adding to the workload of the Inland Revenue and without creating more difficulties for the ratepayer.
While arguments about equity and capital values are interesting, this Measure will, I fear, add to the already complex system of rating law. What will the Bill mean to people? Will it make the position more satisfactory for those who administer the law or for those who must plead against valuations and try to study the system in all its complexity?
I have concluded that the Bill, though it has been described as small and tepid, will not get rid of the increasing number of anomalies in this sphere. Indeed, it may add to them. What may have been thought to have been general practice in making valuations comes under question when one reads, in Clause 1:…shall be regarded as relevant and admissible for the purposes of that ascertainment whether those other dwelling-houses are of the same or a different description and whether they are situated in the same or a different rating district or rating area …Apart from that representing a highly complex operation for any rating officer, could I be told what it means? It is not for this House to create a paradise for the Law Society. We must try to use language which is meaningful to people. Having served on a local valuation court, I strongly advise the House to think many times before using language which will not only fortify the professionals in the court, but strike further terror into the hearts of laymen who must serve on these courts and make judgments.
Already, the ordinary member of the public who goes to a valuation court is faced with the ritual of everyone having to stand to attention while the worthy members of the court enter and take their seats. The public view a sort of Ku-Klux-Klan performance and many people are petrified before the proceedings begin. Not only is the awesome court laid out before him, but there are the professionals present—the Inland Revenue men.
As a member of the Estimates Committee which examined the Inland Revenue this year, I make it clear that 1 have nothing but admiration for the Inland Revenue's professionalism. But 64 it is exactly because of that professionalism that ordinary people are placed in a difficulty. To appreciate it fully, one has to experience what it means when an ordinary person says to the court, "I would like my rates reduced because of such and such a development", and then has to deploy his argument, to make his case.
It becomes a major difficulty, particularly when, even before the operation of the Bill, the Inland Revenue is able to quote case after case and resort to the language, which I used to hear with frequent boredom, about the hypothetical rent which such a property could obtain in 1939. I may be a little out of date on the year, because it is some time since I sat on a valuation court, but, nevertheless, that was the hypothetical line adopted.
If we members of the court were in doubt whether we should reduce the rates by a £1 or £2 that is, if we were novices in the game—the chairman used to trundle us out and, over tea and biscuits, look for some broad guidelines as to what to do. This is part of the facts of life. This is how it is practised. We are not dealing with professional courts of law, but with ordinary people. We are dealing with laymen, plaintiffs not defendants, who are looking for honest answers to very simple questions.
If we are to have in future the Inland Revenue being able to say, "We can now make valuations on the basis of looking at properties of different kinds in different areas", forgetting the whole history of rates, which, with all their anomalies, have been built up from the grass roots of local taxing responsibilities, we are creating, as it were, a morass of complications which a future Royal Commission will take many years to unravel.
The hon. Member for the City of Chester (Mr. Temple) invited us to look at the small print. From some criticism from, perhaps, some of my own colleagues, I have had to weigh carefully and, I hope, seriously, whether we should look at the small print, because many sins in parliamentary life are committed in the words of small print. On both sides of the House, the guilt is truly and firmly laid. In the penultimate line of Clause 1 we read:… by reference only to such evidence …65 We must pick up with great care that word only ".
I will put it and the other words in the context of the last sentence of Clause 1— and the valuation officer shall not be held to have failed in the proper discharge of his duties with respect to the preparation and maintenance of the valuation list by reason of his having assessed a dwelling house or dwelling houses by reference only —Does this mean that the Inland Revenue, removed from its past tests in making an assessment of this kind, has not failed in its duty if the only evidence it brings forward is the kind of evidence called for in the Bill? if that is the case, then many local considerations can be removed.
Does it mean that, in future, a local valuation court will be faced with the situation whereby a person who is questioning a valuation will be able to say,
The local situation in this town is suchand-such and, therefore, I submit that the valuation is wrong and should be reduced ", only to be countered by the Inland Revenue spokesman saying, "I took into account dwellings of a like kind, or of not a like kind, in areas other than this town"? Is that line to be valid? It so, then surely this is not a lukewarm or a small Bill, but a damned dangerous Bill.
§ Mr. Peter M. Jackson
But would not my hon. Friend agree that the argument is equally capable of being presented by the plaintiff? Would it not be up to him to quote properties in other towns and areas which have lower valuations than that proposed for him?
Mr. Lead bitter
I came to the House of Commons with some experience of local government and my experience over the years is that ordinary people are quite unable to put into professional language a good case that they have. The fact that this is so should disturb every responsible public representative. Indeed, this is one of the reasons why I have asked for an ombudsman for local government.
But, this being the case, it is the responsibility of Parliament on a Bill like this to see to it that we include protection for the ordinary people and provide some machinery for it. That is our responsibility if it is right to have other tests 66 for making valuations, involving larger responsibilities for local valuation courts and perhaps making it more difficult for ordinary persons in making their applications.
When 1 was a member of the Estimates Committee, I made a submission to the Committee about the need to look at the question of local valuation courts.
§ Mr. Deputy Speaker
Order. The hon. Gentleman is going wide of the scope of the Bill. He cannot talk about machinery for valuation or valuation courts on this Bill.
§ Mr. Leadbitter
I respect your Ruling, Mr. Deputy Speaker, but I respectfully remind you that the hon. Member for the City of Chester dealt at some considerable length with the question of valuation courts. I believe that it has been accepted that, as a consequence of the Bill, some burden will be laid on these courts, and therefore, in that sense, although I will seek to limit—
§ Mr. Deputy Speaker
Order. The Chair must rule as it hears. The hon. Gentleman may make an incidental reference, but he is going much wider than that.
§ Mr. Leadbitter
I will seek to limit my comments in that direction, Mr. Deputy Speaker, so that we can keep mainly to the Bill.
§ Mr. Temple
On a point of order. May I point out, Mr. Deputy Speaker. that the only reference I made to a possible amendment was in this very sphere which, I think, is the only sphere in which an Amendment was in order, and in accordance with the provisions of the Bill, could be tabled.
§ Mr. Deputy Speaker
Nothing the hon. Gentleman has said suggests that my original Ruling was wrong.
§ Mr. Leadbitter
Nevertheless, the point will have been noted. The Bill will provide more work for local valuation courts. I leave it at that. This is only the Second Reading and this is something to be dealt with more precisely in Committee.
I have said that matters of equity or capital value, although interesting, are not as important as those arising from rating law. I was glad that my hon. 67 Friend the Parliamentary Secretary referred to the unfair burden of rates. The present situation is odd. Over the years, we have been arguing how best in the modern world to get rid of the many anomalies which arise from local taxation through the rates. The Bill makes not the smallest contribution to dealing with the frightful anomalies which are to be found in the large towns and in London in particular.
It does not deal with the problems which arise from properties in multi-occupation. In London, people may oe crowded into rooms for which they may pay unreasonably high rents, but for which the rates are included in the rents or are the direct responsibility of the landlord. Yet the rates of such properties are no higher than those for houses of the same kind in the same structural condition and in the same street but occupied only by two old-age pensioners. That kind of problem has not been solved and the Bill does not seem to be able to tackle it.
The general objective of any progressive party is to redistribute the national wealth, both salaries and other forms of income. One of the most complex problems in this respect with which we have not yet dealt adequately is that of rates.
§ Mr. Deputy Speaker
The Bill is concerned to add a subsection and a subsection alone. It does not provide an opportunity for a general debate on rating, on which the hon. Gentleman is now embarking.
§ Mr. Leadbitter
I was expecting that Ruling, Mr. Deputy Speaker, and I respect it at once.
We have to take great care, when passing legislation, to see that the people are harassed no more than necessary in a difficult situation in which mountains of paper have been almost the main cause of dangerous neuroses. We have to think of simplifying the system rather than making it more complicated. The Bill makes no contribution towards dealing with the problems of rating which have taxed us for years. It has appeared only because the 1973 revaluation requires it. As that is the Bill's only purpose, we shall have plenty of time to consider the wording of the Clause. If no undertakings can be given on 68 Second Reading, I hope that the Government will have taken warning and will resolve to meet some of our requests in Committee.
§ 5.17 p.m.
§ Mr. Martin Maddan (Hove)
The Bill distinctly points a finger at the deficiencies of the rating system. That is not the major topic of the debate, but it must be permissible to debate the Bill within the context of the rating system. To describe the system, I cannot do better than quote three sentences from the Secretary of State for Social Services, when he was Minister of Housing and Local Government. He said:First, the method of arriving at rateable value was always pretty difficult and it began to get detached from reality when rent control was introduced in the First World War. It is now rendered more and more incomprehensible and remote from reality as the number of privately rented houses declines—the only houses where rating has a direct relevance as a tax. The more we move towards owner-occupation, on the one side, and council house tenancies, on the other, the more mythological becomes the rateable value which forms the foundation of this eccentric local tax.I quote that because I want to show that the Bill will not produce anything like satisfactory valuations for a rating system.Before turning to that, I want to take up a fundamental point raised by my hon. Friend the Member for the City of Chester (Mr. Temple). In a sense, he asked what the Bill was all about, why it had been brought forward. He told us that it was so that preparations could be made for the 1973 revaluation. I am not certain that it is intended by right hon. Gentlemen opposite that the 1973 revaluation should take place, and this is fundamental to whether the valuation officers and we in this House are wasting our time. There is not much point in shoring up this system if it is not intended to have a revaluation in 1973.
I will quote just a few more words from the speech of the right hon. Gentleman:I might have fought harder against abandonment ".—[OFFICIAL REPORT, 6th December 1965; Vol. 722, c. 40.]That is what the right hon. Gentleman said when he was talking about the 1968 proposed revaluation. The House, ratepayers and local government generally are all concerned about this, and I hope that the Parliamentary Secretary will take 69 the opportunity, not by implication, but categorically, to say whether the Government intend to proceed with the 1973 revaluation.
§ Mr. Skeffington
The date of the revaluation has to be determined by the House. When a revaluation could not take place in 1968, provision was made in the Act of 1966, Section 16 of which specifies the date as 1973. Legislation would be required if there were to be a postponement. The hon. Gentleman has seen the Queen's Speech, and I am sure that he can draw his own conclusions.
§ Mr. Maddan
I hope, therefore, that the Government are committed, because, in view of the use of the word "abandonment" and the general feeling prevalent in local government circles, we must now have certainty on this.
My hon. Friend the Member for the City of Chester considered that rates would remain a major source of local revenue. No doubt they will, but whether they should continue to produce such a large revenue is a different matter.
§ Mr. Temple
What I said was that it seemed from the purpose of the Bill that rates will be a major source of locally raised revenue. I did not say that I necessarily expected them to be just that.
§ Mr. Maddan
If rates were 5s. in the £, we should not be bothering about the Bill; anomalies here and there would not matter very much; but the high poundage based on the valuation makes the accuracy of the valuation and the comparability between one hereditament and another exceedingly important.
According to the Bill, there will be a great deal of valuation at one remove which will be, according to the evidence of the Select Committee, by the filling in of forms. I have not seen one of these forms, but I want to know about their legal status, by what authority they are issued and the penalties attaching to them. There may have been a recent provision which I have missed, but I suspect that the powers of the Inland Revenue are being extended wholesale in an area never previously envisaged. An ordinary householder who finds difficulty in filling up the form may do so erroneously and so lay himself open to severe penalties. We should not give a Second Reading to the Bill without an 70 assurance on that aspect from the Parliamentary Secretary.
The hon. Member for The Hartlepools (Mr. Leadbitter) gave one example of small print in line 24, and I wish to give another example of small print in line 14:for the time being in forceThose words refer to valuation lists for the time being in force, and must mean that one cannot dispute the comparative increases between one's neighbour and oneself. It is only possible to dispute what is happening in the new list, and one cannot say, "My neighbour's valuation has gone up 10 per cent.; why has mine gone up 20 per cent?".
This will put the ordinary ratepayer at a disadvantage. It may be argued that this is correcting an anomaly and that we should look to see what is fair and just for the present, but the best judgment that an ordinary householder can make is by seeing what is happening to his neighbour and comparing the immediate past with the present.
The relationship between flats, houses, bungalows, and so on, has been mentioned by hon. Members on both Front Benches. The Parliamentary Secretary went out of his way not to lead flat dwellers to hope that the rateable value of flats would come down to the level of houses. By the same token, therefore, the rateable value of houses must be going up. The Parliamentary Secretary shakes his head, but I do not follow how there can be an adjustment between the two without movement one way or the other. I hope that there will not be a perpetuation of the high valuations for flats.
Paragraph 375 of the Committee of Inquiry into the Impact of Rates on Households, the Allen Committee, Cmmn. 2582, reads as follows:Taking all housing costs together in relation to income, we find that they are generally quite high for retired households …Flats and retired households are the hall mark of my constituency.
The second phrase which I wish to quote from that paragraph is as follows:The proportion "—that is, the proportion of housing costs to income—is a good deal higher in London and the South generally …71 People living in flats on the South Coast and in comparable areas, whose housing cost in relation to their income is so high, are extremely hard hit by high valuations. I hope that the Bill will make their lot a little better.
When the Parliamentary Secretary made his coy reference I thought that he was holding out a little hope, but did not want flat dwellers to have too much hope. That was very prudent of him. But when I said that that must mean that the rateable value of households will go up, he shook his head. I am at a loss to know the implication of all this. I am sure that the hon. Gentleman will have permission to speak again in the debate, when I hope that he will make the point clear.
I am not talking about the technicalities or niceties of valuation. Politically, what was felt to be most wrong about what happened in 1963 was the sudden apparent discrimination made against people in flats, particularly in areas like London and the South Coast. I hope that the hon. Gentleman will address himself with rather more precision to this matter and will tell us the advice which I am sure he has received from the Inland Revenue about the Bill's effects in this respect.
I have raised these points to show that the Opposition are not very happy about the Bill, or the circumstances of its introduction, or the state of the rating system which it is intended to improve. The rating system has gone so askew and has such huge burdens placed on it in the form of high rate poundages that we shall never get the matter right until we find other forms of local revenue which will enable the rate poundages to be reduced and therefore not make so extremely uncomfortable the anomalies which are bound to exist in any system based on the present form of rating valuation.
§ 5.32 p.m.
§ Mr. Peter M. Jackson (The High Peak)
I am happy to take up the request of the hon. Member for Hove (Mr. Maddan) to my hon. Friend the Joint Parliamentary Secretary for clarification of that part of his speech which I must apologise to you, Mr. Deputy Speaker, and to him for missing.
72 I should declare an interest in that for the major part of my life I have lived in a flat as an owner-occupier. I have felt a sense of injustice in that, unlike people who prefer to live in semi-detached or detached dwellings, I have paid what I regarded as a disproportionately high sum in rates. I should like to draw attention to the considerable inequalities which I have experienced.
The first flat which I lived in was in the East Riding of Yorkshire, in a dormitory suburb of the City of Hull. I sold that flat for £3,600 when I moved to Sheffield. It was rated at £82. I bought a flat with similar accommodation in Sheffield for a smaller price-0,250. Yet I found when I looked at the valuation that it was rated at £29 more—that is, £111. Obviously, I appealed. I drew the valuation court's attention to this disparity. I was told by the chairman of the court that the true basis of valuation was flats in this particular part of Sheffield and that I was out of order in drawing attention to the situation in the City of Hull or on the outskirts of Hull.
I therefore welcome the fact that the Bill intends to broaden the basis of comparison. I make the point to hon. Members opposite and to my hon. Friends who have been unanimous in criticising the Bill that it provides some safeguards for aggrieved ratepayers like myself in that when arguing their case before the valuation panel they can look outside their area for evidence upon which to base their argument, as I did. I do not think that anyone would argue that Sheffield is very different from Hull. There are safeguards in the Bill not only for valuation officers but for aggrieved ratepayers.
There is a considerable disparity between the basis for assessment for flats on the one hand and semi-detached and detached houses on the other. Before taking my case to the valuation panel in Sheffield, I went to some trouble in finding properties with an equal valuation; namely, £111. I was fortunate enough to find in estate agents' lists two properties on the market which were valued at over £6,000. I purchased my flat for just over £3,000. The properties which I found were rated at £111 and were in more select parts of Sheffield. They had four bedrooms compared with the two bedrooms and box room which was all the accommodation provided in 73 my flat. Yet the valuation was identical. I tried to direct the attention of the court to what I regarded as a highly anomalous situation in that here there were properties selling at a greater figure and yet they had a comparable valuation. Again I was ruled out of order.
A clear anomaly has been demonstrated and I hope that we shall go some way towards removing it, not only because considerations of equity and justice are involved but on another ground; namely, densities. Our population is increasing. We must accept that we shall experience high densities and that a higher percentage of our population will live in flats. I hope that flat dwelling will become more popular. It is accepted in the South but less so in the North and Midlands. There is a marked reluctance on the part of people to live in flats because of the high rateable assessments. I hope. therefore, that as part of the spinoff from this Bill some equality will be achieved in the valuation of flats on the one hand and semi-detached and detached dwellings on the other.
Finally, I wish to echo a comment made by many hon. Members; namely, that capital values are perhaps a more adequate basis for valuation than hypothetical rents. I do not live in a flat any longer. I sold my flat and moved into Derbyshire. The property in which I am now living cost almost twice as much as the flat which I sold. Yet there is what I regard, and what I am sure anyone else would regard, as an absurdity. The property for which I paid over £6,000 in Derbyshire is rated at £82 whereas the flat in Sheffield which I sold for just over £3,000 is rated at £111.
I do not regard this as fair and just in any way. We are becoming a more mobile population, and I am sure that people who move about would similarly not regard it as very just. I therefore welcome the Bill in the hope that it will iron out the considerable inequalities and anomalies which I have related.
§ 5.40 p.m.
§ Mr. Julian Ridsdale (Harwich)
My hon. Friend the Member for the City of Chester (Mr. Temple) dealt in his excellent speech with the relationships between bungalows, flats and houses. I hope that the Joint Parliamentary Secretary, when 74 he replies to the debate, will say also what is to be the relationship for caravans rated individually.
My hon. Friend the Member for the City of Chester also drew attention to the fact that little time had elapsed between publication of the Bill and Second Reading. The Parliamentary Secretary, in his defence, put forward the argument that there had been little criticism of the Bill. I hope that he is not under a delusion in thinking that a lot of criticism about the Bill is not coming from the local authority associations or other people. I hope, therefore, that sufficient time will elapse before the Bill goes into Committee so that we may give it more consideration. I may be disparaging the Minister, but I fear that his intention is possibly to hurry the Bill unduly. We should give it adequate consideration.
In opening the debate, the Minister put up, I thought, an admirable defence against allowing criticism of the Bill by almost saying to Mr. Speaker, "The Bill is narrow in scope. Protect me from any questions about the reform of local government finance." What a wonderful way of silencing criticism!
Because I feared that that was what the Parliamentary Secretary might say, I went upstairs to the Public Bill office to find out how wide I might be able to go in discussing the Bill. I pointed out to the Public Bill Office that the aim and purpose of the Bill was to make more certain the long-promised revaluation of 1973. Surely, this affords very wide scope indeed, because the question is whether the 1973 revaluation will go through. My view of the Government's proposals, such as we have heard up to now, is that they are only tinkering with the rating problem and that far more radical solutions are necessary. Without radical solutions, I do not believe that it will be possible to have the 1973 revaluation, because—
§ Mr. Deputy Speaker
Order. Whatever the hon. Member has been told, the Chair has made it quite clear that the scope which the hon. Member seeks is beyond the debate.
§ Mr. Ridsdale
After what the Joint Parliamentary Secretary said, I feared that that might be the Ruling of the Chair, Nevertheless, I have protected myself in 75 thinking that I might be able to make a slight foray into the more general purpose, so that I may—
§ Mr. Deputy Speaker
Order. I have to say that no hon. Member has any special influence with the Chair.
§ Mr. Ridsdale
Thank you, Mr. Deputy Speaker. Nevertheless, I hope for a moment to get down to the detail of the Bill, important as it is, because I know that it has grave defects concerning the freedom of the individual. I want to see much more effective safeguards for the ratepayer as an individual.
It would be very wrong—indeed, deplorable—if for administrative convenience we allowed to go through a Measure such as this which put the ratepayer in a quite impossible position in the matter of sustaining effective objection to entries in the new lists. From my experience and what I can make out, it appears to be the Government's intention to pool evidence of rents of all types of dwelling, including flats and bungalows—nothing has been said so far about the renting of caravans individually—and that the valuation officer can seek his evidence from anywhere, within or outside the rating area, and call in aid the relationship between rents and gross value shown in the lists now in preparation.
All this suggests, at the very worst, that some weird short-term arrangement might be adopted for the revaluation, a crude kind of multiplier, for example. No matter how bad the contents might be, however, the plain fact is that such a murky pool of evidence will leave the poor old ratepayer in a quite impossible position to understand what has been included as relevant and admissible and what this relationship business means. I notice that several hon. Members opposite have made this very point, especially from their long experience in local government.
In my view, if the Bill goes through in its proposed form the position of the individual ratepayer will be hopeless. Collectively, something might be done. The obvious answer would have been that the rating authorities in every area could, and should, be the public conscience for all ratepayers in the area. That is a role which in North-East Essex and in Clacton. in my constituency, in particular, 76 I am glad to say they have effectively carried out since the Inland Revenue took over the revaluation for rating. I hope that they can be relied upon to act as help-mates between ratepayers and valuation officers to ensure a general level of fairness.
I cannot imagine that the Government will create a glorified local ombudsman, much as I sympathise with the hon. Member who made that admirable suggestion, for the protection of the individual. But could not the Government extend the powers of the valuation panels to include certain administrative obligations as distinct from their purely judicial responsibilities? If this were done, they could be an effective buffer. Their predecessors, the old assessment committees, certainly functioned effectively in the role of vigilant honest brokers.
Although these details are important, I hope that we shall not lose sight of the wood for the trees. What is really important ahead of the revaluation is that we get a genuine reform of the financing of local government, without which it will be useless. It is high time that we learned more about the Government's intentions on this vital issue. There is no declaration about it in the Bill. Because this is the first time that we have heard anything about the refinancing of local government, I hoped that the Joint Parliamentary Secretary. in introducing the Bill, would give us a glimpse into the Government's thoughts in this matter, because from my large experience of rating in North-East Essex I assure him that the 1973 revaluation will be impossible unless we have an adequate and wide reform of the financing of local government. In my view, the Bill only tinkers with the problem.
§ 5.49 p.m.
§ Mr. Paul Hawkins (Norfolk, South-West)
I am grateful for having the opportunity to say a word on the Bill. I apologise for not having been here at the beginning of the debate. I have as a professional man, a chartered surveyor, appeared in front of these rate courts on behalf of clients. I must admit that I have never particularly enjoyed it; it is not a part of my work I really enjoy. or, for that matter, understand very well.
However, I understand from the Explanatory Memorandum that the Bill is to provide a wider range of evidence of 77 rents of dwelling-houses to be used in the preparation of valuation lists. It goes on to say that evidence can betaken into account in, or adduced in connection with, a valuation to be drawn from areas, and from classes of dwelling-house, which cannot at present be so taken into account.It ends by saying that the Billwill in fact ease the burden which a complete revaluation imposes on the Valuation Office".What we want, as I think the hon. Gentleman the Member for The Hartle-pools (Mr. Leadbitter) has said, is to ease the burden on the ratepayers much more than the burden on the valuation office.
I shall be as brief as I can, but I am worried about two points, in particular, and there are two questions I should like to ask. Does the Bill mean that the valuation officer can take into account, as has been hinted by hon. Members on both sides of the House, when assessing a house in, say, my constituency, which has three little market towns and several villages, a house in a different area—say, London or Birmingham, or, for that matter even Cambridge, 33 miles away, where—and this is the point I want to emphasise—scarcity value is a major factor'? This would seem to be quite wrong.
In my area, within a radius of 20 miles, are to be found houses of similar type, and between them one can make a true comparison; but in an area where houses are in far more demand, as they are in Cambridge, a centre where there are many local government headquarters and nationalised headquarters, I would have thought it far more sensible to compare the houses within that centre with one another, not with houses in a small market town in my constituency.
Moreover, I would not have thought it possible in fairness to compare flats with houses, semi-detached houses with detached houses, and so on. There are different types of persons looking for different types of dwellings, and one has to take and compare like with like, and not with something entirely different.
I may be misunderstanding the Bill, but I assume from reading it that that is what it means, and I would think it quite wrong, and that it will add to the difficulties of the ordinary householder or his professional adviser.
78 My second point, which follows on from that, is that the Bill seems to be weighted against the householder who wishes to appeal, or against his adviser, who may be a surveyor or valuer in the district. He cannot compare houses in, say, Cambridge, 30 miles away, or even farther—in Norwich, 40 miles away—with a house which is in a little town near to his practice. He will have great knowledge of his next-door neighbour's house and he will have great knowledge of houses over several miles, but the Inland Revenue will surely be at an unfair advantage, because through connections with its offices all over the country it will be able to bring forward comparisons which the householder or his adviser in one locality cannot in any way check; and if he were to check them it would cost him a very large sum of money.
If I understand the Bill aright it does not seem to me to clarify the law; it does not seem to clarify practice; it does not seem likely to make the householder any happier, or his professional adviser for that matter, in going to appeal. Therefore, I would hope the Minister will make quite clear what it does mean and, if necessary, alter it, so that these comparisons cannot be brought against householders.
§ 5.55 p.m.
§ Mr. Peter Walker (Worcester)
First, I should very much like to congratulate my hon. Friend the Member for the City of Chester (Mr. Temple) upon his very skilful analysis of the implications of the Bill and to observe how sharply contrasted his speech was with that of the Minister, who gave the impression that this was really a cosy, splendid little Bill to which we really need not give too much consideration and that it would just make a life a little bit more convenient. I apologise to the hon. Gentleman the Member for The Hartlepools (Mr. Lead-bitter). I like to be in the Chamber when he speaks if he says the sort of things I like him to say. I rather gather that today he did, and I apologise to him, for I was not here when, I understand, he called the Bill a morass of complication and rather dangerous. I hope that as a result of what has been said this afternoon the Minister will give very careful consideration to what the Bill is meant to 79 achieve and how he thinks it is to achieve it.
I would ask the Minister to give a rather fuller explanation of what is the urgency of the Bill. It is rather remarkable that the Government introduce among the very first Bills of this Session this Measure, thus giving the impression that they are in rather a hurry to see it through because there is some urgency about it. I believe that the urgency was effectively described by my hon. Friend—that the valuation office is in such difficulties with all the additional work involved with the Land Commission that there is a desperate need to try to ease its administrative task. So we are being asked to accept this formula for the worst possible reason. I should like an explanation of the reasons for the urgency.
Perhaps the Minister, when giving that. will also explain the delay, and why the Bill comes at this time, because it was in 1965 that the Minister now the Secretary of State for Social Services told us that there was to be a complete reform of the rating system. All we get now, four years later, is a miserable two-Clause Bill which is likely to complicate the system still further.
There are some other points to which 1 should like the Minister to give particular attention. Is there any intention to stop the 1973 revaluation? I should like him to give an absolutely firm assurance that the Government intend to carry out revaluation in 1973.
Secondly, I should like him to comment on the potential effect of the Bill on some of the more remote rural areas. I am genuinely concerned that this basis of taking examples of houses throughout the country may have an adverse effect upon rural properties in rather remote areas. There is real concern among people in rural areas that their houses can be compared with houses which are in or near the places where there are more amenities, just because houses in rural areas may be of a type similar to houses in an area of greater amenity, and that that will be very much to their detriment.
As to the question of houses, flats, bungalows, all being compared together, I cannot believe the Minister has done 80 this without any thought at all as to the likely result. Surely before the Ministry decided to make this the basis of the Bill it inquired what the likely effect would be? Surely the Ministry did not just say, This is what the Government would like to do and we have no idea what is likely to happen ". There is a general view that such comparison would be to the advantage of flats, judging by contributions made in the debate.
Is that the Minister's view? If it is the Minister's view, it naturally follows that the Bill would be to the disadvantage of houses. Is this the object? The Government have got to "come clean" on this issue. At present, they are just saying, "We are bundling them all together, but we do not know what the result will be ". I do not believe that the Government are so ill-informed as to what the result is likely to be. It may be that the Bill could in certain areas bring quite considerable increases of rates on houses, as compared with flats. If that is the object of the Bill let the Government be perfectly clear about it and state that this is their object and that that is what they believe will happen. Otherwise very real suspicion and anxiety will exist among ratepayers living in houses and bungalows.
The Parliamentary Secretary has the task of replying to the cogent point made by my hon. Friend the Member for the City of Chester as to why only houses, flats and bungalows are concerned. Why does this comparison not apply to other forms of property, including mixed property?
When my hon. Friend posed the position of the local person finding half a dozen similar houses in his locality, the Parliamentary Secretary stated that the individual would be perfectly at liberty to find examples from his locality, and what better example could one have in trying to come to a decision? This therefore means that in his view the local circumstances are more important than any other factor. But is that so? Is it so, for example, if it is argued the other way, that these types of houses in other parts of the country or houses with similar amenities in other parts of the country will form part of the argument which is more important than those parts presented by the individual?
81 One of the difficulties about this Measure is that the task of collecting evidence nation-wide is easier for the authorities than it is for the individual. If nation-wide evidence is to be obtained to the benefit of the authorities it can be easily obtained, but the individual searching for nation-wide examples has far more difficulty and is involved in far greater expense. To that extent this Bill could be of advantage to the authorities at the expense of the individual. If so, this is a very serious shift of advantage for the Government to undertake.
§ Mr. Arthur Jones
Does my hon. Friend recognise that when submitting evidence to a valuation court one has local evidence which the owner will submit as opposed to nation-wide evidence submitted on the part of the Inland Revenue? How will the Inland Revenue present that knowledge and information?
§ Mr. Walker
This is a very important fact. The Inland Revenue has available all the nation-wide information, but the individual has no such information: he has only local information. There is a very real difference of advantage as a result of this Measure.
Mr. R. W. Brown
(Shoreditch and Finsbury): This has always been so in my area, where fiats are very much higher rated than houses in Islington. A four-bedroom house in Islington is the equivalent to a one-bedroom flat in Finsbury. When people objected to their assessments in 1962-63, they were told that they had to make the comparison in relation to their own area and could not pray in aid evidence from further away.
§ Mr. Walker
I am willing to concede that there may he advantages to an individual in obtaining evidence outside his area, but on balance when there is a dispute between the individual and the authorities in practice the individual can fairly easily collect supporting evidence locally because he has the means of obtaining it while the Revenue has all the resources whereby to collect nationwide evidence.
Even the valuation panel will not permit evidence to be taken from further than the immediate area.
§ Mr. Walker
This is what the Bill is all about and what we are objecting to. 82 Another factor which I want the Parliamentary Secretary to take up is this. As it has been decided to bring in this emergency Measure, why did the Government not include other matters urgently affecting rates? I quote one instance which was referred to by my hon. Friend the Member for the City of Chester. Changes in the nature of the gas industry have created circumstances by which a great deal of the property used by the industry will not come under general rating. We now see a Bill brought in because of the pressure on the valuation office through previous Government legislation, but bringing no advantage to the ratepayer, and bringing potential disadvantages without the Government giving an adequate reason for introducing it at this moment. The Parliamentary Secretary may be assured that we shall not only listen to his remarks in winding up the debate but shall take great care over the Committee stage of the Bill.
§ 6.5 p.m.
§ Mr. Skeffington
With the permission of the House, I wish to reply to the many interesting points which have been made in the debate.
As I expected, a number of hon. Mem- bers have directed their attention to the possibility, as they saw it, that the individual rate payer might be disadvantaged under the Bill. That was a very proper point to make, but I assure hon. Members that this was not the purpose. Indeed, we think that the contrary will be the case. I shall seek to give some examples.
It was through no fault of mine that we were precluded from having a much wider discussion of the whole rating system and local government finance. I am dealing with this Measure, which obviously has a very limited application, and, as with other hon. Members, I have to keep within the rules of order. Personally, I should very much welcome an opportunity to deal with all the implications of local government finance. No doubt there will be further opportunities for that when we come to the restructuring of local government. The next major milestone will be the White Paper on the reform of the structure of local government, about the end of the year or the beginning of next year.
§ Mr. Skeffington
The hon. Member must wait to see the White Paper. It is to deal with structure. I do not know how much it can deal with other matters. I do not think it possible to deal with the whole subject of finance until w-t know something about the structure.
§ Mr. Peter Walker
This is the first time that we have heard the White Paper referred to in terms of being likely to appear next year. Has this significance? It has always been promised at the end of this year. As the Maud Report contained no reference to financing, presumably the White Paper will follow suit.
§ Mr. Skeffington
As to the second point, the hon. Member had better wait until he sees the White Paper. I wish to give the best advice I can as to what will be the next stage.
Although the debate has been brief, the number of relevant points made has been large. The hon. Member for the City of Chester (Mr. Temple) made a number of points, to one of which I referred in an intervention which he kindly allowed me to make. Because it is important. I repeat that, as I said in my speech and in the intervention, there is nothing in the Bill which takes away any rights of any party in considering these matters at any level or of any kind. It can be argued that all parties, quite apart from the valuation officer, will have a better opportunity to present evidence about rental values than has been the case hitherto. That is the whole purpose of the measure.
§ Mr. James Allason
(Hemel Hempstead): Would the Parliamentary Secretary consider the position of valuation panels? I find it difficult to follow how, if evidence is given about the value of houses 100 miles away, a valuation panel will be able to go and inspect those houses. Is it reasonable that this should be expected of them, or does the hon. Gentleman wish to cut down the scope of valuation panels and prevent them inspecting houses?
§ Mr. Skeffington
Perhaps I can deal with that point when I come to the matter of evidence.
I affirm what I said before, that in a number of cases which have come before the Lands Tribunal, and in cases within my own experience, if it had been pos 84 sible to adduce evidence wider than that existing in the rating area concerned it would have been greatly to the advantage of local rate payers in an appeal. But under the existing practice, apart from there being some discretion in the valuation office which is always open to challenge, in the normal way that additional evidence would be precluded. It will now be possible for it to be brought forward.
In the same way where one is dealing with hereditaments of a different description, it will be possible to bring into argument not only the valuation of houses, but, at the same time, if it is helpful to any of the parties, valuations of flats, bungalows, or caravans, or any other form of residence.
All those who are experienced in these matters will realise that it is a matter of evidence, and that the rules of evidence in rating cases are no different from the general rules of evidence in other cases. The final judgment which is given depends on the view taken by the court of the evidence presented. Therefore, it was a fallacy for the hon. Member for the City of Chester to say that a ratepayer who produces evidence of six houses in the local area will be at a disadvantage because someone else may go 100 miles away for evidence.
The fact is, as Lord Denning said in his judgment, that although at that level all evidence can be admissible its "goodness" or "badness" depends on the weight given to it by the court. If either a valuation officer or a ratepayer has a ready-made example on the other side of the street, then that is the best evidence. It must be tested against the normal rules which apply when a tribunal of any kind considers evidence which is before it.
§ Mr. Temple
Why in the Bill is it necessary to say of evidence that it shall be "relevant and admissible"? If evidence is any good at all, it is relevant and admissible. Why is it necessary to spell this out?
§ Mr. Skeffington
The hon. Gentleman has not sufficiently studied the rules of evidence. There are two points to be considered. First, evidence has to be relevant, but also, it has to be admissible. Hitherto, the general rule has been—this certainly applies to local valuation courts —that evidence which goes very wide of the area is not admitted.
85 The Bill admits that evidence, and it then can be considered whether it is relevant and how far it can be weighed in the adjudication. Nothing in the Bill alters the way in which the tribunal has a duty to consider the evidence; it will now be able to look at a wider range and different descriptions of dwelling houses. But the weight which is given to that evidence will be for the tribunal.
The best evidence for rating purposes in a local valuation case would be an identical house in the next street. But difficulties arise for both valuation officers and ratepayers that so often such evidence does not exist. If large numbers of hereditaments were being let in the normal free market, then the evidence would be there and there would be no need for the Bill.
But the fact is that instances of rental values being negotiated in the open market are becoming more and more scarce. Therefore, in the interests of everybody it has been thought right to allow the description of various properties to be considered and also examples over a wider area.
It does not mean, as was suggested by hon. Members opposite, that a whole number of examples will be mixed up together. If either a valuation officer or an individual adduces evidence about the value of a house as opposed to that of a flat, then it is up to either side to produce evidence on the other side as to size, convenience, and so on. It is to be considered only to the extent that it may be helpful to compare other categories of property.
What hon. Gentlemen opposite must not overlook is that it is for the court to make its judgment on the quality of the evidence before it and the best evidence will be the nearest evidence. I will not bind myself in every case, but would say that the best evidence would probably be that of a dwelling house within a stone's throw of the house which is being adjudicated.
§ Mr. Leadbitter
The Parliamentary Secretary is making the situation far more confused. Does he mean that we must accept a situation in which he says the best evidence is the nearest evidence —that which is likely to be in the same street? What, then, is the purpose of the Bill? Why seek powers to go else 86 where for evidence if we are told that the best evidence is in the next street?
§ Mr. Skeffington:
When my hon. Friend considers the point, I am sure that he will see the answer. The Bill meets the case where there is no best evidence, where there is no local evidence. If that point has not been grasped—
§ Mr. Leadbitter rose—
§ Mr. Skeffington
I will give way in a moment. I must make progress with my argument. This is a most elementary point. It is because the evidence of rents is becoming so scarce that we feel the need for this Measure.
The hon. Member for the City of Chester commented on the unfairness of gross values and asked why they have continued to be used. That matter may be considered when the time comes for the basis of rating law to be altered. It has been mentioned that in 1965 my right hon. Friend the present Secretary of State for Social Services referred to the matter of gross values. A number of these cases have been the subject of appeal, and I believe that the situation is now better than it was.
I am not saying that we now have the perfect rating system and that if only we put in this addition, all will be well. These are matters which will have to be considered later in greater detail. We are considering the rating law as it is, coupled with the difficulties to which I have referred.
My hon. Friend the Member for Nottingham, West (Mr. English) and the hon. Member for City of Chester both referred to capital values and suggested that these might be a better basis. The fact is that capital values cannot be used at present. However, it is a point which will be noted in a review of these matters which the Government are making.
The hon. Member for Northants, South (Mr. Arthur Jones) hoped that there would not be too much rigidity. My view is that this widening of the evidence and the contrasting in a rating area of different types of properties will make for greater flexibility. But, again, the rating law depends upon the assessment of the individual property and the relation of rents to gross value. Anything which can be shown to give better evidence in the sense of having both different types of 87 properties and over a wider area, I think, will go to the aim that I have expressed rather than to rigidity.
With the growth of transport and the building of new and expanded towns outside the greater conurbations, there has been some levelling of property values. There are variations, of course. No one is saying that properties in the centre of London or Birmingham can be compared with others in remote areas. If that sort of evidence was brought before a valuation court by a valuation officer, the court would know what weight to attach to it.
My hon. Friend the Member for The Hartlepools (Mr. Leadbitter) made criticisms of the language. If my hon. Friend is a member of the Committee which considers the Bill, I hope that he will assist us in getting the Measure made more simple and clear. Having studied a good deal of rating legislation over the past 10 or 15 years, I think that the Clause which my hon. Friend criticises is perfectly clear. Compared with the 1953 Act, for example, which was introduced by Mr. Harold Macmillan, if one compares what a valuation officer had to do under that Act and under this Bill I think that the advantage is with the Bill.
My hon. Friend also made a point about different types of dwellings. All that Clause 1 does is to say that, in making his list, if a valuation officer brings in properties of a different type or from a wider area as evidence, by that he is not guilty of failing to carry out his duty. Obviously he will want to produce examples which will give him the best list, and the weight to be attached to such evidence is a matter for the court.
The hon. Member for Hove (Mr. Maddan) and the hon. Member for Worcester (Mr. Peter Walker) both referred to the 1973 revaluation. I have pointed out already that Section 16 of the 1966 Act specifically puts in a date. Legislation would be required if the Government proposed to alter the date. There is no reference in the Gracious Speech to legislation to postpone the 1973 revaluation. It would be a tragedy if the revaluation had again to be postponed. The longer that it is delayed, the greater becomes the anomalies. We want to get on with it with the minimum amount of 88 complication. It is because rental evidence so often is not available that we have this Measure.
I was also asked what was the authority for the issuing of forms. No issuing of forms arises under the Bill. However, the authority for the Inland Revenue issuing forms is Section 82 of the 1967 Rating Act. Hon. Gentlemen will find the authority there for what is being done.
I was grateful for the remarks of my hon. Friend the Member for The High Peak (Mr. Peter M. Jackson), though I cannot say whether his own valuation will be better now that we are introducing new types of dwellings. Nor had the Government that in mind when the Bill was being devised.
The hon. Member for Harwich (Mr. Ridsdale) asked me about caravans. Certainly, they can now be contrasted with any other form of dwelling. However, the best evidence for caravans obviously will be about caravans, and that comes back to my point about the weight which will be attached to evidence. His wider points are beyond the scope of the Bill. Certainly, they are beyond the scope of my remarks.
I come now to the speech of the hon. Member for Worcester. I have answered his point about postponement, and I hope that I have answered his point about evidence. It is extremely important to realise that the whole purpose is to get the widest facilities for everyone before the court. That is why the Bill is drafted in this way. I cannot find any reason to believe that the proposed procedure will have the kind of effect which he fears. If one is dealing with the advantages or disadvantages of remote properties, the evidence of remote properties elsewhere will be helpful.
I know that right hon. and hon. Gentlemen opposite have a "bee in their bonnets" about the Land Commission. However, it is the total load of work and not merely that which has been created in connection with the betterment levy which has given rise to the necessity for the postponement.
I hope that the House will agree that this is a useful Measure. We shall consider all the points which have been made—
§ Mr. Maddan rose—89
§ Mr. Skeffington
If the hon. Gentleman is rising to ask whether flats or houses are likely to go up, no one can possibly say what the effect will be until the evidence has been produced, valuations are completed, and matters have been tested.
My point is that many flat occupiers thought that, because of the scarcity of rental evidence, their assessments had been pushed up to make up for the lack of information and knowledge elsewhere. They felt that they had a grievance because they could not contrast flats with dwelling-houses. I think that that sense of grievance will disappear, because it is now possible to compare and contrast and to talk about the various types of valuations for the particular types of properties.
§ Question put and agreed to.
§ Bill accordingly read a Second time.
§ Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills.)